Micro, Small, and Medium Enterprises and public procurement participation: the nexus of supply chain finance, digitalization and barriers in Nairobi County
Date
2023
Authors
Muladi, A. E.
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Publisher
Strathmore University
Abstract
Public procurement is practiced everywhere, among both developed and developing economies. The arguments for the inclusion of relatively smaller firms in public procurement suffice since they offer a significant contribution to the economy and offer employment to a wide number of people in every nation. Though the contribution of micro, small, and medium enterprises (MSMEs) in the development of economies has been widely discussed in contemporary studies, their participation in public procurement contracts still remains an issue. In Kenya, despite the institutional reforms and policies carried out in public procurement, MSMEs still struggle to participate in public procurement contracts. With this backdrop, the current study examines how supply chain finance, digitalization, and barriers impact MSMEs’ participation in public procurement markets. Data for the study were collected from prequalified suppliers registered under Public Procurement and Regulatory Authority (PPRA) in Nairobi County. A sample size of 100 consisting of prequalified government suppliers was selected. A multistage sampling beginning with systematic and ending with a simple random sampling approach was adopted and an 84% response rate was achieved. The survey approach was adopted by administering questionnaires to the respondents. A multiple regression model was employed to estimate the structural model of the study. Statistical software, SPSS Version 25, and Hayes Process MACRO were used to analyze the data quantitatively. The regression findings revealed that there is a positive and significant effect between Supply Chain Finance and MSME Public Procurement Participation. It was also revealed that Digitalization has a positive and significant effect on MSME Public Procurement Participation. Again, barriers to MSME pubic procurement participation have a significant but negative effect on MSME Public Procurement Participation. It is therefore recommended that owners and managers of MSMEs invest in digital tools such as e-procurement technology, software, procurement management systems, etc. to make them competitive enough to participate in public procurement calls. Also, MSMEs should utilize the available supply chain finance solutions to be capable to expand and compete with larger firms in public procurement activities. The study was limited to using three variables as independent variables and recommended that future studies may investigate a model where digitalization will be the independent variable, supply chain finance, the mediator, and barriers, the moderator.
Keywords: Public Procurement, Digitalization, Supply Chain Finance, Micro, Small and Medium Enterprises (MSMEs).
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Citation
Muladi, A. E. (2023). Micro, Small, and Medium Enterprises and public procurement participation: The nexus of supply chain finance, digitalization and barriers in Nairobi County [Strathmore University]. http://hdl.handle.net/11071/13405